citybeat (2006-28)

City and Sunsphere redevelopers hash out utility costs and leasing terms

The city rethinks strict package-store regulations

Wednesday, July 5

Reigniting the Sun

One of the proposed new tenants of the Sunsphere—Knoxville’s favorite World’s Fair souvenir—suggests that the structure’s history of hefty utility bills may not be as problematic as advertised.

“We know the bills were high, but why were they so high?” says Suzanne Shelton of Shelton Group, a marketing and advertising firm currently located in the Fourth and Gill neighborhood. Shelton is in negotiations with Sunsphere redevelopers Kinsey Probasco Hays & Associates, along with Knoxville partner Brian Conley, to move into the 7th and 8th floors of the structure when refurbishing is complete. Recent reports claim utilities ran as high as $60,000 per annum at the Sunsphere in years past.

“Right now, we don’t know those answers,” says Shelton, whose clients include a number of energy and utility companies. “Before we assume it’s a lost cause, we’d like to get a consultant in here to make some recommendations.”

According to Conley, the Sunsphere ran up $36,000 in utilities the last year it was in use, when the city’s Public Building Authority occupied three floors while overseeing work on the Knoxville Convention Center.

Shelton says that figure might be reduced by shrewd energy-efficiency measures. For starters, she says her firm will take basic steps such as installing compact fluorescent light bulbs, programmable thermostats, and low-flow toilets. “Then we need some real experts in here, to look at what we can do, what the expenses would be,” she says.

But utility costs aren’t the only obstacle to the Sunsphere’s impending rebirth. The city and Kinsey Probasco must also resolve differences over sharing those costs, lease terms, and parking availability.

Conley says he and KPH have proposed to lease the Sunsphere for $36,000 per year for 40 years, and pay $2 per useable square foot for utilities, which he calculates at roughly $23,000 per year. “Added together, we are offering to pay approximately $59,000 per year,” says Conley. Rent figures would likely be subject to escalators, at set intervals, based on the Consumer Price Index, and utility escalators would be based upon any increases in KUB’s rates, he adds.

KPH and Conley’s request for 11 parking spaces at the base of the Sunsphere was denied, Conley says; he characterizes the parking question as the most significant of the issues that remain unresolved.

Knoxville Senior Director of Policy Development Bill Lyons says he is uncertain of the prospects for allocating parking spaces to the Sunsphere development. He also stresses that none of the details regarding lease terms or utility sharing have been decided yet, but that negotiations are continuing. Also, he adds, it is important to ensure that a sufficient portion of the structure is open to the public.

In addition to Shelton’s firm, plans call for the redeveloped Sunsphere to include a fourth-floor observation deck, a fifth-floor lounge featuring a limited menu, and a sixth-floor rental space for hosting special events. The lounge and event space would be run by a local catering company, Southern Graces Catering and Events.

Southern Graces owner Bob Sukenik says he anticipates that operating the lounge and events spaces will be easier and more cost-efficient than the full-fledged restaurant that briefly occupied the Sunsphere around the time of the 1982 World’s Fair.

For catered events on the sixth floor, Southern Graces will prepare most of the food off-site, and use the Sunsphere kitchen as a staging area. “We want it to be a classy place, not a theme park,” Sukenik promises. “It’ll have some style.”

One thing the Sunsphere won’t include is offices for
Metro Pulse
, as had been suggested when
MP
owner Conley and KPH were first awarded the redevelopment contract in early 2005. “Originally, plans were to move
Metro Pulse
into the Sunsphere,” Conley says. “Since that time,
Metro Pulse
has grown significantly, and there simply isn’t room for both
Metro Pulse
and an ongoing food-service operation.

“What’s important is that we get the Sunsphere reopened to the public,” Conley adds. “And I agree with the city administration that using the entire Sunsphere for office space is simply too private a use.”

Last Thursday evening, about 40 citizens gathered at the East Tennessee Historical Center to talk about liquor stores. The history center’s getting a lot of use for non-historical meetings these days; maybe in part because, unlike the City County Building meeting rooms, it doesn’t require a security screening. This particular meeting did have certain historical aspects.

The matter at hand was the problematic 1962 statute in the city codes, passed at a time when package liquor had just been legalized in Knoxville, after having been completely illegal for 55 years. It prohibits the sale of bottled alcohol within 500 feet of “any church, school, park, recreational facility, hospital, mortuary, or similar public place....”

The problem, as some recent entrepreneurs have learned, is that that one clause makes package liquor illegal in almost all of the Central Business Improvement District. The location of liquor stores is much more restrictive than the location of bars, which began legally serving liquor by the drink about a decade later, when there was apparently less anxiety about the issue of location.

Most entered the room assuming the problem was purely a matter of an anachronistic law passed by Knoxvillians of 1962 who perhaps had never even seen a liquor store.

Bill Lyons, Knoxville’s Senior Director for Policy Development, led the discussion. He brought up the fact that, since 1962, the city has added several parks to downtown, showing maps of several arrangements of downtown that seemed to permit liquor stores only on a couple of patches of Central Street, near the Old City.

Some who raised hands questioned the logic of the law in general, specifically why it was important to avoid liquor sales within 500 feet of any of the listed institutions anywhere in the city. Lyons quickly quashed such questions as counterproductive, emphasizing the prospect of keeping the law intact, but perhaps making some sort of exception for the CBID.

Because almost all the questioners were critical of the law, and in favor of allowing a downtown liquor store, Lyons asked if there was anyone in the room who thought the law should remain as is. Four men raised their hands. All four were wearing blue uniforms. Speaking as individuals, but with one opinion, the police officers declared a liquor store downtown would constitute a significant problem concerning the homeless.

The statute as written has no provision about the proximity of homeless to the availability of alcohol. However, perhaps ironically, some of the institutions that Knoxvillians of 1962 wanted to remain chaste of any proximity to a liquor store—like churches, parks, and hospitals—are just the sorts of places that attract the homeless in 2006. Of course, the city’s homeless shelters are also clustered near downtown, as well.

The policemen referred to the last liquor store downtown, one on Market Square that, up until it closed in 2000, reportedly did some business with vagrants. Though the store carried a variety of liquors, the fact that the store carried small bottles and inexpensive liquors seemed evidence that it was catering to the homeless. The policemen in attendance expected similar problems to result from any relaxation of the codes.

Lyons acknowledges some of the ironies of the current law, which allows people to get drunk near Knoxville parks, as long as it’s in restaurants or bars—but doesn’t allow them to buy wine in the same neighborhood for home consumption.

“We’re not sure when or if anything will come of it,” says Lyons, saying the administration has no specific plans to push the issue now. He says that’s up to City Council, and some councilmen are known to be interested in the issue.

One is Chris Woodhull, who introduced an ordinance that would have allowed a liquor store on Gay Street, and then withdrew it.

“I don’t see it as an exception,” Woodhull says of the proposal to allow a wine and liquor store downtown.
“I see it as growing pains” he says, that reflect not only cultural shifts, but the reality of a densely developing city center. He adds, “When we passed the ordinance, we did not have a livable downtown. When the homeless shelters were set up, downtown was a place where nobody was interested in living.”

Woodhull, who is also at work on issues involving the homeless, says things have changed. “Whether you’re a person who likes fine wines, or a teetotaler, we’ve got to find a way to accommodate each other. And we’re not a real work-together kind of community.”

The city is soliciting public comment via its website,
www.ci.knoxville.tn.us
, which also includes a summary of last week’s meeting.